Bloom Energy's Q3 2025 Earnings Call: Contradictions Emerge on Capacity, Brookfield Partnership, and Product Configurations Highlight Strategic Uncertainties

Date of Call: October 28, 2025

Financials Results

• Revenue: $519.0M, up 57% YOY
• EPS: $0.15 per share (non-GAAP), compared to $(0.01) in Q3 2024
• Gross Margin: 30.4%, up 510 basis points vs 25.2% in Q3 2024

Guidance:

• Fiscal 2025 expected to be better than previously stated annual guidance.
• Doubling production capacity to 2 GW by December 2026 (to support ~4x 2025 revenue).
• Continue targeting double-digit annual product cost reductions to drive margin accretion.
• Prioritizing operational talent, R&D and commercial investments while maintaining financial discipline.

Business Commentary:

• Record Revenue and Growth Trends:
• Bloom Energy reported record revenue of $519 million for Q3 2025, up 57% year-over-year.

• The growth was driven by increased demand for on-site power generation due to AI buildouts, policy changes favoring on-site power generation, and the company's product innovation leading to cost reductions.

• Gross Margin Improvement:

• Bloom Energy's gross margin improved to 30.4%, 510 basis points higher than the 25.2% gross margin in Q3 of 2024.

• The improvement was due to ongoing focus on product costs and manufacturing efficiencies.

• Strong Financial Performance and Profitability:

• The company reported operating income of $46.2 million, compared to $8.1 million in Q3 last year, and adjusted EBITDA of $59 million, up from $21 million in Q3 2024.

• This was supported by positive cash flows from operating activities and seventh consecutive quarters of profitability in the service business.

• Commercial Momentum and Market Expansion:

• Bloom Energy noted accelerated commercial momentum across sectors, with significant deals in AI and traditional sectors like telecommunications.
• The expansion is benefited by strategic lighthouse accounts and partnerships with major players, and increased time-to-power demand driven by AI buildouts.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted a "fourth consecutive quarter of record revenue," described commercial "momentum is clearly accelerating," reported positive operating cash flow and service profitability ("seventh consecutive quarter of profitability in our service business"), and stated "we expect 2025 to be better than our previously stated annual guidance."

Q&A:

• Question from David Arcaro (Morgan Stanley): How do you see the pace of commercial activity and pipeline progressing given recent agreements?
  Response: Commercial momentum is accelerating across AI and traditional industrial segments; deal cadence varies but overall activity is increasing.

• Question from David Arcaro (Morgan Stanley): How does Bloom compare to small gas turbines and gas engines in data center deals; is competition heating up?
  Response: Bloom's solid-state fuel cells offer higher power density per footprint, no local air pollution, no batteries required for load-following, faster deployment and broader future-proofing (DC, carbon capture), delivering superior price-performance for hyperscalers.

• Question from Christopher Dendrinos (RBC Capital Markets): Please expand on the Brookfield partnership, timing and financial benefits.
  Response: Brookfield is a strategic partner and inaugural $5B investor, will recommend Bloom across its portfolio, finance Bloom-originated deals, and plans a Bloom-powered European AI inference data center announcement by year-end.

• Question from Christopher Dendrinos (RBC Capital Markets): Are you seeing similar power constraints internationally and does that drive overseas growth?
  Response: Yes — Europe and Asia face power shortages; shifting policy toward long-term LNG and strong interest in Bloom's carbon-capture capability create significant international opportunity.

• Question from Manav Gupta (UBS): How would a proposed FERC 60-day interconnection rule change help Bloom?
  Response: Faster interconnection reinforces the 'bring your own power' trend; Bloom can rapidly deploy on-site power and provide valuable grid ancillary services, making utilities and data centers more likely to adopt fuel cells.

• Question from Manav Gupta (UBS): If chip makers move to 800V DC by 2027, does that make Bloom more efficient?
  Response: Yes — 800V DC is required for next-gen high-power AI racks and Bloom's architecture already supports high-voltage DC, giving it a clear advantage over legacy generation systems.

• Question from Nicholas Amicucci (Evercore ISI): How should we think about utilization of the planned 2 GW capacity and the path to ~4x 2025 revenue?
  Response: Factory expansion is designed to avoid being a customer constraint; Bloom will scale capacity prudently based on ROI and demand and may expand beyond 2 GW as needed.

• Question from Nicholas Amicucci (Evercore ISI): How does Bloom's offering differ for inference versus training data centers (latency/placement implications)?
  Response: Same modular architecture scales from inference to training; Bloom is well-suited for local, low-noise, non-polluting inference sites that require proximity and reliability.

• Question from Ben Kallo (Robert W. Baird): How do you view large projects (e.g., 80 MW with SK) and customer comfort with scale?
  Response: Modular, copy-exact systems eliminate scaling risk; Bloom can serve from small retail sites to multi-hundred-MW projects, and larger deployments improve system reliability.

• Question from Ben Kallo (Robert W. Baird): What drives a go/no-go decision to expand beyond 2 GW and how fast can you do it?
  Response: Decisions are discipline-driven and ROI-focused; Bloom will expand capacity as needed to ensure it never becomes a bottleneck for customers.

• Question from Mark W. Strouse (JPMorgan): How should we think about gross and operating margins as capacity and utilization increase?
  Response: Expect continued double-digit annual product cost reductions and disciplined investment in people and technology; detailed annual guidance to be provided in ~90 days.

• Question from Michael Blum (Wells Fargo): Can you quantify the Oracle opportunity and Bloom's role?
  Response: Cannot disclose customer specifics; Oracle called the initial project 'the first of many,' indicating a large, multi-geo opportunity where Bloom adds execution and technology value.

• Question from Ameet Thakkar (BMO Capital Markets): Does the $288M of related-party revenue in the 10-Q relate to Brookfield or SK?
  Response: Related-party revenue is tied to Brookfield JVs resulting from small equity investments Bloom made under the partnership.

• Question from Colin Rusch (Oppenheimer): How is the mix shifting between direct sales and financing options, and update on the CFO search?
  Response: Majority of deals are PPA-financing structures with some direct CapEx deals; managed services are unlikely going forward; CFO search is active with urgency but no hire yet.

• Question from Maheep Mandloi (Mizuho): Why not provide precise Q4 guidance?
  Response: Quarter-end timing is driven by lumpy, project-based installations and customer readiness; small shifts in project timing around Dec 31 make precise Q4 guidance unreliable.

• Question from Sherif Elmaghrabi (BTIG): Any additional capital commitments for Bloom under Brookfield JVs beyond small equity investments and Fremont CapEx?
  Response: No material additional capital commitments beyond the small agreed equity investments for JV projects.

Contradiction Point 1

Capacity Expansion and Utilization

It involves the company's strategy and timelines for capacity expansion, which directly impacts production capabilities and potential revenue growth.

How will capacity expansion and utilization evolve as we enter 2027? - Nicholas Amicucci (Evercore ISI Institutional Equities)

2025Q3: Bloom's capacity expansion is disciplined and focused on meeting customer needs without becoming a bottleneck. Utilization will grow as we expand capacity. - K. Sridhar(CEO)

How long will the capacity expansion take, and when do you expect to exceed the 1 gigawatt capacity? - Unidentified Participant (JPMorgan)

2025Q2: We are already well-funded for the expansion. We can increase capacity quickly, potentially faster than data centers can stand up their facilities. We are building for future growth. - K. R. Sridhar(CEO)

Contradiction Point 2

Customer Perception and Scalability

It involves the company's positioning regarding customer perception of its technology, particularly in relation to large-scale projects, which could influence market perception and demand.

How do customers perceive Bloom’s technology in large projects like the SK deal? - Ben Kallo (Baird)

2025Q3: Our scalability allows for large-project flexibility without additional risk, from small retail stores to large data centers. - K. Sridhar(CEO)

What drives your confidence in doubling production capacity? Is it due to improved visibility or strong industry demand? - David Keith Arcaro (Morgan Stanley)

2025Q2: We have strong commercial activity and a diverse pipeline, giving us confidence to expand our capacity. The large hyperscalers spend $1 billion a day on CapEx, requiring significant new power capacity. Our product offers a solution at AI speed when existing infrastructure cannot. - K. R. Sridhar(CEO)

Contradiction Point 3

Brookfield Partnership and Investment

It involves changes in the nature and scale of the Brookfield partnership, which could impact Bloom's financial and strategic positioning.

Can you provide details on the Brookfield partnership and its development timeline? - Christopher Dendrinos (RBC Capital Markets)

2025Q3: Brookfield is an important partner, investing $5 billion initially, with plans to announce an AI infrastructure project by year-end. They will finance Bloom-sourced AI opportunities and recommend Bloom as the preferred power provider. - K. Sridhar(CEO)

What is the current status of domestic C&I power demand and its impact on orders? - Unidentified Analyst (Truist Securities)

2025Q1: Brookfield is stepping up as a strategic investor and is working with us in conjunction with the California Infrastructure Economic Development Corporation to bring as much as $4 billion in permanent financing to new projects beginning in our fiscal fourth quarter. - KR Sridhar(CEO)

Contradiction Point 4

Commercial Momentum and Deal Timing

It highlights differing perceptions about the speed and timing of commercial agreements, which could impact investor expectations regarding future growth.

What's the pace of commercial activity and how do you expect it to progress with your multiple agreements? - David Arcaro (Morgan Stanley)

2025Q3: Commercial momentum is robust and accelerating, especially in AI and traditional commercial-industrial segments. Complex deals are closing with increased speed due to demands. - K. Sridhar(CEO)

Will there be more utility agreements like the AEP deal? Can you provide timing or cadence for these agreements? How do you plan to fund growth with free cash flow? - Andrew Percoco (Morgan Stanley)

2024Q4: Yes, we are talking to several utilities interested in similar arrangements. The process is ongoing, but specific timing is unclear. KR is optimistic about more deals, although the primary obstacle is aligning construction timelines with state regulations. - K. Sridhar(CEO)

Contradiction Point 5

Product Configuration and Variability

It involves changes in the way Bloom Energy discusses its product configurations, which could impact how investors and customers understand its offerings.

Does switching from 400V AC to 800V DC improve fuel cell efficiency? - Manav Gupta (UBS Investment Bank)

2025Q3: Bloom's architecture is ready for 800-volt DC, allowing it to convert more power efficiently and position itself well for the future. - K. Sridhar(CEO)

Have supply chain issues affected the timing of data center projects? - Andrew Percoco (Morgan Stanley)

2025Q1: We are a modular, scalable, emitterless, alkaline fuel cell technology company with a hybrid design that utilizes a binary electrolyte. We provide the lowest installed cost solution at scale. - KR Sridhar(CEO)